Elliott Wave Analysis and Outlook of Nifty after Budget

| February 2, 2018

Nifty opened bit higher at 11044 and bounced further to register high 11103 but traded with huge Volatility thereafter. Nifty declined by more than 220 points to register day’s low 10878 and then bounced back by more than 230 points to register day’s high 11117 and finally closed 10 points down at 11016.

For budget day, I expected Nifty to trade volatile with Up-Down-Up swings within 11097-10878 range and this range also had possibility to expand till 10736-11171. And I suggested buying Nifty if decline near 10878 using stoploss of 40 points OR initiate hedges longs near 10878 using stoploss of 10729.

Nifty traded exactly within expected range of 10878-11097 (actually traded between 10878-11117) and longs initiated near 10878 gave good profit of more than 200 points. Now, let’s have a fresh look at latest charts for further scenario.

This analysis is covering bounce from low 9687 and earlier wave counts are explained in my last “All time Frame” report Elliott Wave Analysis Update of Nifty on All Time Frames as on 22 Jan 2018

Elliott Wave analysis of nifty on 5 hour chart

Elliott Wave analysis of nifty on 5 hour chart

This is 5 hour time bar chart of Nifty covering bounce from low 9687 which I marked as start of wave (v) of 3 on Daily Chart.

It seems, wave may (1) completed from 9687-10490 (pattern is not clear), Wave (2) completed from 10490-10033 and wave (3) in progress from 10033 which already achieved minimum 123% projection after breaking above 11025 and next 161% projection is placed at 11332 which may or may not be achieved.

Within wave (3), it seems inner wave (i), (ii) is already completed and (iii) may be in progress. And within wave (iii), it seems inner wave [1], [2] , [3] may be completed till 11171 and wave [4] or [5] may be in progress.

38% retracement of progress of wave [3] of (iii) of (3) is placed at 10878 which is the immediate breakeven point on downside and Nifty bounced exactly from 10878.

Minimum 38%-61% projection for wave [5] is placed at 11279-11555. So, 11297-11555 is the minimum target range for upside if wave [4] already completed at 10878.

Let’s have a deeper look at progress of wave [4] started from 11171 on separate lowest possible time frame chart.

Elliott Wave analysis of nifty on 15 minute chart

Elliott Wave analysis of nifty on 15 minute chart

This is 15 minute time bar chart of Nifty covering decline from all time high 11171 which I am expecting as start of wave [4] on 5 hourly charts.

Normally, it seems that wave [4] already completed from 11171-10878 as Simple Zigzag correction with wave (a) from 11171-10979, (b) from 10979-11103 and (c) completed from 11103-10878. Wave (c) also projected 100%-123% of (a).

The sharp bounce from 10878-11117 is Impulse and can be wave (A or 1). Normal 38%-61% retracement for wave (B or 2) is placed at 11025-10969 whereas 11004 is already achieved. But the swings very sharp which is making it difficult to identify inner waves of (B or 2).

Other Possibility:

Wave (b) looks like an Impulse but (b) is always a corrective wave. So, there is also a possibility that wave (b) completed at 11117 as Irregular Correction and wave (c) for 10878 and below is still pending. Nifty can register one more low below 10878 before further bounce in this case.

Conclusion

Nifty traded exactly same as we expected. Though today was an important days and biggest event for stock market but still Elliott Wave Theory helped to calculate the Nifty movement correctly.

Now, the decline started from 11171 is carrying all the rules and personalities of a corrective pattern. So, we can expect one more bounce above 11171 may be towards 11279-11555 in coming days with 10868-10737 as very good support on downside.

It is difficult to calculate Intraday or very short term levels because of huge volatile and sharp swings today. We will try to calculate short term levels after seeing the stability in market.

Trading Point of View:

  1. Overall, Nifty is expected to bounce above 11171 again in coming days with 10878-10736 as good support on downside. So, any decline towards this range can be used as buying opportunity but support range and stoploss is big so trade only if you can handle this big stoploss or trade in Feb series options. Otherwise wait for a small pattern to form to initiate low risk trade with small stoploss. Small traders can wait for stability in market.
  1. Otherwise, who want to trade Intraday can use tomorrow’s opening price to trade with small stoploss. As overall outlook is positive so trading on long side is safe. So, note tomorrow’s opening price and wait for 15 minutes after opening. Nifty if trades above opening price at 9:31 AM (15 minutes after opening) than longs can be initiate using stoploss of day’s low (low made till 9:31 AM). Hold for next day only if Nifty closes near high of the day.

BANK NIFTY ANALYSIS

“Elliott Wave Analysis Reports of Bank Nifty” with “Bank Nifty Weekly Options Trading Strategies” Daily is also provided by one of my personally trained student Vinod Sharma on his website http://www.ewanalyst.com/ Links to some of his analysis Reports are: –

Tags: , ,

Category: Nifty

About the Author ()

Deepak Kumar is an independent Technical Analyst, regular practitioner and Trainer of Elliott wave theory applying Elliott's Wave Principles on Indian Markets successfully since 2011 and made many accurate predictions. He is also the author of book "Practical Application of Elliott's Wave Principles by Deepak Kumar"

Comments are closed.